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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
2013-09-11 Daily Xml
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FARM DEBT

Mr VENNING (Schubert) (15:29): Recent reports about the rise of farm debt over the past 30 years demonstrate that our farmers need more support and financial assistance from governments to be sustainable into the future. The minister acknowledged on 2 September:

The agricultural sector is extremely important to our state's economy, contributing $16 billion a year through food and wine.

If this is the case, why has this sector faced repeated cuts from this Labor government? The current budget decreased from the previous year, yet again, from $89 million down to $77 million, including a $4 million reduction to SARDI. Employee numbers have been reduced from 961 to 916; this follows a reduction from 1,052 in June 2013.

Our primary producers are faced with an increasingly difficult marketplace to navigate, and are trying to compete for both domestic and export market share with overseas producers who receive subsidies from their respective governments. Primary producers in other countries receive much more support than our farmers, such as direct payments, price support, minimum set prices, help with crop insurance, disaster response, credit, marketing, export subsidies and import barriers.

Governments in Norway, Switzerland, Iceland, Japan and Korea support their agriculture industries with average subsidies ranging from around 60 to 75 per cent. Many of our farmers are living and operating on their savings or just rising debt. This is in comparison to the assistance measures offered to our Australian farmers of less than 4 per cent, one of the lowest rates of assistance for agriculture anywhere in the world.

How are our farmers supposed to compete in such an uneven marketplace? Our farmers do not have the political clout they used to have, particularly with the demise of SAFF. Even though the new body is under way, there is still more ground to make up. Following the release of the 2013-14 budget, chairman of Primary Producers SA, Rob Kerin, said:

...it is disappointing to see the Government again decrease its investment in the industry...

Our producers do not look for handouts, but the government role in [research and development], biosecurity and accessing markets is vital to underpinning the enormous contribution of food and wine to the SA economy.

Regional SA is the power house of our economy, and reducing the budget for PIRSA yet again hurts the industry.

Agriculture is integral to our nation's prosperity, and the prosperity of farmers is integral to the country communities in which they live. I hope that governments recognise how important the industry is and provide more support for our farmers so they have more surety about their future being sustainable and viable.

I hope the election of the federal Abbot Liberal government will herald a turnaround, to be consummated with the election of the Marshall Liberal government here in South Australia next March. With the mining boom largely behind us, it is expected that we will no longer be able to avoid the downturn that currently grips most of the western world.

Farmers need debt to survive through the production cycle, but if the burden becomes too great to the farmer, then the resulting adverse impact is as great on the economy as it is for the individual farmer. The impact on the viability and prosperity of country towns is directly related to the wellbeing of farmers. A paper delivered by Queensland farmer and economist, Ben Rees, reported in the News Weekly, has a frightening statistic:

In 1981, the annual net value of farm production was about equal to debt. By 2011, the net value of farm production was just over AUD$10 billion; but farm debt was around AUD$65 billion—some six-and-a-half times greater.

I do not think any of us can remain silent on why this is. A study of the Australian Productivity Commission chose not to address the subject of farm debt at all. Mr Rees says his view is that policy failure is directly responsible. The article continues:

...more specifically, market failure arising from the economic policies Australia adopted post-1983. He observes that these deregulationist free market policies became the preferred policy policies became the preferred policy direction of all major political parties, farm leaders, media commentators and, in his phrase, 'some academics'.

Rees believes that the problems of our farm sector, including its descent into crippling debt, are attributable to the changes in economic philosophy which followed the collapse of Bretton Woods.

...If rural Australia was a member of the Eurozone, international financial markets would refuse to fund it.

Thank goodness we are having a great year on the farm this year. We do pray for a rain very shortly, but we are looking at hopefully a bumper year. It would certainly be a fillip to the economy and to all the individual farmers, but these statistics worry me. We have to turn it around. We have to work out why it has happened and governments, of both persuasions, have to do something about it.

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